P2P Lending Platform News Round-up

by The Secret Investor

ThinCats founders sell a majority shareholding to ESF Capital to gain access to greater resources… many P2P Lenders to Businesses see a downturn in activity in the run up to Christmas… conversely, those involved with Personal Borrowers have substantially increased their Totals Lent… No doubt people have been leaving their desks and heading to the shops!

Totals lent to date (10th December 2015)

*All data correct at the time this blog was compiled

LOANS TO BUSINESSES

Assetz Capital – £83,746,460
Funding Circle - £975,806,640
FundingKnight - £28,216,500
FundingSecure - £17,761,624
Money & Co –  £6 million approx
Rebuildingsociety - £8,567,425
ThinCats - £141,189,000
Invest and Fund - £1 million plus
LendingCrowd - £3.7 million
ArchOver - £10,545,000

PERSONAL P2P LENDING

Zopa - £1,200,000,000
RateSetter - £928,897,651

Lending Works - £17,869,078

…………..

LOANS TO BUSINESS

Assetz Capital  

Lent to Date: £83,746,460 – increase of £729 – 0.00% growth.

It has been a very quiet fortnight for this platform.

5 loans currently require funding. A further 4 are due to be drawn-down during December. These have returns from 9.25% to 11% pa.

3 managed accounts protected by provision funds with returns of 3.75% to 7% depending on accessibility.

Funding Circle

Lent to Date: £975,806,640 – increase of £30,831,640 – 3.26% growth.

The record-breaking volumes that were experienced in November (when the platform lent £62.6 million) reduced very slightly during the first week of December and this was only due to there being fewer A and B rated loans, all other risk bands remained very active.

Auto-shopping: Auto-bid continues to pick up loans for me from the C, D and E bands that I am happy to keep including a borrower who is an IT service provider with a portfolio of well-known clients. They were raising additional working capital following the deployment of cloud based systems which are expected to prove popular with their customers.

Other kept loans were to a builder, property developer, medical tape wholesaler and hair salon. The responses provided by borrowers in the Q&A sections on this platform have greatly improved in recent weeks.

There was one loan I decided to move on. This was to a medical testing company that had a poor credit rating and high liabilities. I sold it at a 0.3% mark-up, the first time I had attempted to sell at a profit, and a buyer picked it up the following day. Although I only made a few pence profit, it still put a smile on my face.

Defaults: No defaults for me in the past fortnight although a few of my loans are worryingly late.

FundingKnight

Lent to Date: £28,216,500 – increase of £125,000 million – 3.79% growth.

Two auctions were listed in the past fortnight. One was to raise £75,000 of working capital for a nursery. The other was for a chain of eyebrow salons with outlets in department stores for borrowers looking to raise £150,000 to fund their expansion plans.

The latter business rang a bell and, indeed, there was mention in the Q&A of a loan request being made via the ThinCats platform but it failed to be fully funded. FundingKnight investors had supplied the required capital at the reserve interest of 12% pa despite no signed agreements with the stores for additional floor space being in place.

The loan to the nursery also met its reserve of 11.25% pa.

A third auction was added to the site just as this blog was being compiled. It was a 12 month bridging loan to enable a chain of petrol stations to add a further site to their portfolio. The reserve interest rate was just over 9%. Security is provided by a first legal charge over one of the stations.

FundingSecure

Lent to Date: £17,761,624 – Figure updated monthly and has increased by 10.25% since the last snapshot.

FundingSecure continues to set records and November was the first time their active loan book exceeded £10m.

Fab Friday: While there were no auctions taking place when this report was compiled, Friday, 11th December, is going to be a busy day on this platform with 3 new loans and 3 renewals looking for investment. All the new loans are for relatively small capital amounts – £23,000, £5,000 and £1,1000 – and so should be rapidly snapped up. In all cases, a return of 12% pa is offered and security is held against pasture land, a watch and jewellery.

Rail for Sale: I invested in a loan secured against model railway accessories but afterwards I had a nagging feeling that I had already lent to that borrower. A quick check of my portfolio confirmed that suspicion so I popped my new holding on to the Secondary Market with a 1% Premium and it was sold within the hour earning me a quick 50p! How regularly could I do that I wonder? Certainly one way to avoid the risk of defaults.

Platform news: This is the time of year for reflection and FundingSecure have looked back at how their investors have benefitted since they started up 2 and a half years ago. Half a million pounds of interest has been earnt with defaults of £12,000. Before tax the average return has been 11.9%. Impressive stuff although such returns can never be guaranteed of course.

They expect their success to continue into the New Year especially as exhibiting at the recent Finance Professional Show at Olympia generated lots of interest from brokers new to this method of raising capital.

Money & Co

Lent to Date: £6 million approx. (latest available figure) 

There were no auctions taking place when this report was compiled.

rebuildingsociety

Lent to Date: £8,567,425 – no increase in the past fortnight.

There are 2 auctions active on this site.

Back of the Class: I didn't invest in a loan to a mother and daughter who wanted raise £120,000 to take over a nursery. There were concerns about their inexperience and the poor quality of the documentation they provided. The full amount of capital they required was provided by other investors however – their appetite for risk exceeded mine.

Uplifting experience: I did invest in a fork lift specialist who requires a quarter of a million pounds to refinance debt. Given the large amount of capital they are looking for, a good rate of return should be available to investors and I have pitched my bid at 18% pa. Even at this high rate, their monthly repayments will be lower than their current arrangement so hopefully this is fairly safe although a return this high is always going to involve some risk.

ThinCats

Lent to Date: £141,189,000 – increase of £825,000 – 0.59% growth.

6 loans are available to invest in.

Highlighted Loan: The second in a series of loans to fund a property development in the North West is an interesting proposition. In total a million pounds is being borrowed and so far this has been done in £200,000 chunks. Once completed the site will be worth double the amount borrowed. At no time will the amount lent exceed a LTV of 95% which is why the capital will be raised in instalments. Security is provided by a sole debenture over the borrower (plus a full personal guarantee) and a first ranking sole charge over the site.

Although investors will not see any capital or interest until maturity, a return of 13% is on offer. This would be very tempting if the minimum bid of £1,000 on this platform wasn't well out of the range of a Skinny Cat such as myself.

Platform News: The founders of ThinCats, Kevin Caley and Peter Brown, have sold a majority (73.4%) shareholding to ESF Capital with the expectation that this bring substantial investment to the platform in terms of both money and human resources. ESF have secured funding from leading UK and US institutions. The plan is to use this to grow the business.

As well as a significant recruitment drive, the aim is to upgrade the computer infrastructure at ThinCats. Interestingly, this has led to the long overdue replacement website being scrapped altogether and an upgrade to the hardware which underpins the existing software will be made instead. Hopefully this will resolve many of the ongoing performance problems.

The new owners are considering the development of a completely new website – they obviously didn't like the one that had been built to replace the current set up – and enlarging the ThinCats' IT Department will be one of the focuses for their recruitment drive.

Invest & Fund

Lent to Date: Over £1 million

There was one auction listed that required funding.

Highlighted loan: A £278,500 bridging loan to redevelop a church in Bristol by knocking it down and construction 4 bungalows. Investors are offered a return of 10% with the security of a first fixed charge, debenture and guarantee. Initial LTV is 53%. As with the previous loan that we reported on a fortnight ago, there will be no capital or interest repayments until maturity which is better news for the borrower than investors who have everything at risk for the entire term.

LendingCrowd

Lent to Date: Over £3.7 million when the site last updated their figures.

There were two auctions taking place when this blog was compiled.

Highlighted Loan: Borrower looking to raise £35,000 to upgrade the bar in his North London restaurant. Claims to be bringing West End style nights out to the area. Sounds very ambitious and a slight concern over a report from the Food Hygiene Agency led me to only invest £20 at a slightly above average 12% pa.

Platform News: From 3rd December, Lending Crowd increased their sale fees. Having previously been 0.25% they were doubled to 0.5%.

ArchOver

Lent to Date: £10,545,000 – increase £630,000 – 6.35% growth.

This site has now lent more than £10 million and, on the day this blog was compiled, a regular borrower on the site – a company providing credit to SMEs – reached their target of raising another £100,000 to further expand their business. The return of 6.5% is less than loans on many other sites in this section of the blog but the risks are also much less as in addition to security via a first, floating charge on the borrower's Accounts Receivable, the loan is also insured.

The low risk is underlined by the fact that no loans have defaulted on this site.

PERSONAL P2P LENDING

Zopa

Lent to Date:  £1.2 Billion – increase of £20 million – 1.69% growth.

Returns: Interest rates are 3.8% to 5% depending on the length of the investment. These are unchanged from a fortnight ago.

Zopa distribute investor's money mostly to unsecured consumer loans however capital is covered by a Provision Fund

Ratesetter

Lent to Date: £928,897,651 – increase of £25,598,078 – 2.83% growth.

While many platforms are experiencing lower growth in the run up to Christmas, Ratesetter have bucked the trend with an exceptional increase in the past fortnight. No doubt, thanks to the tie up with the British Business Bank (see Platform News), there will be even more growth in the months ahead.

Returns: Interest rates are set according to supply and demand. They currently range from 3.2% to 5.9% depending on the length of the investment, the former is slightly down on a fortnight ago.

As this blog is compiled on Thursdays these values are likely to be at the lower end of the spectrum as rates are highest during the weekends before ebbing away on Wednesdays and Thursdays. There is also a 4 weekly trend which see the best returns around the 25th of the month.

I don't have time to track the Ratesetter market in detail and, as investors have no choice in who their funds are lent to, I am happy to use the AutoBid facility on this platform especially as it is historically low risk.

Capital is covered by a Provision Fund. Ratesetter proudly boast that no investor has lost a penny since they launched in 2010.

Platform News: The British Business Bank has announced a partnership with Ratesetter. The Government owned company has previous offered finance to sole-traders but now they are also going to support small businesses by supplying capital to the Ratesetter platform. This investment will sit alongside funds provided by the site's retail investors. They will not be involved with funding consumer borrowers who make up a significant proportion of Ratesetter loans.

Having started out with 3 employees 5 years ago, Ratesetter now employs 120 staff and this has necessitated a move to new offices in Bishopsgate. The relocation was scheduled to take place last weekend.

Lending Works

Lent to Date: £17,869,078 – increase of £857,027 – 5% growth.

Lending Works is another P2P operator involved in personal loans that has seen an impressive increase in totals lent over the past fortnight.

Returns: 4.7% and 6.1% for 3 and 5 year investments respectively – unchanged from a fortnight ago.

As well as a Provision Fund to cover investor's funds, this site also insures borrowers against redundancy, fraud, illness and accidents making this a very fair site for all concerned.

****Disclaimer: This blog contains the views of the Secret Investor. Your capital is at risk when lending via all P2P Platforms. You're recommended to speak to a qualified Independent Financial Advisor.